ALBAWABA - In the latest twist of the Red Sea crisis, major shipping companies are rerouting their vessels away from the region, triggering a sharp surge in container prices. Concurrently, China's trade rebound is contributing to the rapid escalation of these prices.
In the aftermath of attacks by Houthis, who control a portion of Yemen, prominent shipping firms are strategically changing their routes to avoid the Red Sea. This strategic shift is occurring at a time when container prices are witnessing a significant uptick.
Drewry, a leading maritime consultancy, reported a historic surge in the World Container Index for the week ending January 4. The spot freight rate for a 40-foot container witnessed a remarkable 61% increase, jumping from $1,661 to $2,670, according to Drewry's findings.
Freightos.com's data aligns with this trend, revealing a substantial spike in spot prices for shipping a 40-foot container from Asia to Northern Europe. The prices have exceeded $4,000, marking a staggering 173% increase compared to mid-December.
In response to the escalating tensions, Maersk, one of the world's largest transportation companies, made a significant announcement last week. The company declared its decision to redirect all ships on the Red Sea and Gulf of Aden route to navigate through the Cape of Good Hope.
A report from Linerlytica highlighted that approximately 12% of the global container ship capacity is currently directed towards the Cape of Good Hope route, with expectations of this number growing.
Alphaliner's latest weekly report suggests that carriers may be benefiting from increased demand due to a surge in Chinese exports in November – the first such increase in six months.
Container prices on key routes are witnessing substantial increases. The Shanghai-Rotterdam route experienced a 115% surge in a week, reaching $3,577 from $1,667. Additionally, prices rose by 30% to $2,726 on the Shanghai-Los Angeles route and by 28% to $3,858 on the Shanghai-New York route.
Comparing the Drewry index to the same month last year, a 25% increase is observed. Despite this surge, average prices remain just $3 below the ten-year average of $2,673.
